Microsoft was not the defendant in the case. Instead, the defendant had sent emails out through Outlook. Those emails went through Microsoft servers, which then sent into "into the cloud."

In reality, the emails were sent to a data center in Dublin, Ireland, where they were stored. All the information on U.S. servers was then deleted.

In the case, lawyers for the plaintiff subpoenaed Microsoft for the emails that it had in storage. Microsoft turned over all the information it had on servers in the U.S. - which problably wasn't much. But for all the information stored in Dublin, Microsoft refused to do anything.

The Second Circuit had to decide whether the Stored Communications Act gave courts enough power to reach out of the country and impose its power on foreign shores.

A recent Supreme Court case, RJR Nabisco v. European Community, the Supreme Court reminded courts that they rarely had the power to go outside the borders of the U.S.

And since there was little evidence that Congress intended the Stored Communications Act to go any further, the Second Circuit decided that - at least for a neutral third party such as Microsoft here - a subpoena's power ends at the water's edge.